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3 Tech Stocks for Growth Investors to Buy Right Now

Check out these 3 Zacks buy-ranked cloud stocks to consider for July...

Growth investors are often focused on finding companies whose earnings and revenue are expected to outpace the market. This investment strategy comes with its share of risks. Yet, it also brings the exciting possibility of outsized returns.

For years, many of Wall Street’s most high-performing growth stocks have emerged from the technology sector. Recent examples include household names like Netflix NFLX and Facebook FB to Nvidia NVDA and other chip stocks. Despite some volatility, strong earnings and impressive sales remain the story for many companies in the technology sector.

With that said, let’s pair the proven Zacks Rank with our Style Scores system. This system includes a “Growth” category that helps us find tech stocks poised for solid growth. Investors should note that our Growth category values earnings and sales growth, as well as improvements to a company’s financial statements, including strong cash flows and solid return on equity.

Now it’s time to check out three tech stocks that came through our screen today that growth investors might want to consider at the moment…

1. ServiceNow NOW

NOW shares have surged over 55% in 2019 to help push its two-year climb to over 170%, which destroys its industry’s 24% average and the S&P 500’s 19%. ServiceNow offers its clients the ability to digitize and automate some of their business and operations, which is a market that looks poised to grow for years to come. The Santa Clara, California-based company’s cloud platform and solutions help with everything from IT to employee and customer workflows. Investors should know that
Fortune
ranked ServiceNow No. 3 on its “Future 50” list of global companies “with the best prospects for long-term growth” last year, behind only Weibo WB and Workday WDAY and ahead of giants such as Salesforce CRM and Netflix.

On top of that, NOW—which was also
Forbes’
No. 1 World’s Most Innovative Company in 2018—is coming off a better-than-expected Q1. ServiceNow’s adjusted full-year earnings are projected to surge 28.5% on the back of 32% revenue growth, based on our current Zacks Consensus Estimate. Looking further ahead, NOW is projected to see its adjusted EPS figure jump 34.4% above our 2019 estimate in 2020, with revenue expected to soar 28% from a projected $3.44 billion this year to $4.41 billion in 2020. ServiceNow is a Zacks Rank #2 (Buy) right now that has crushed its bottom-line estimates in the trailing four periods.

2. Veeva Systems Inc. VEEV

Veeva offers cloud-based solutions for the pharmaceutical and life sciences industries and boasts more than 700 customers, which include pharmaceutical giants and biotech firms such as Eli Lilly LLY and Biogen BIIB. The firm’s main offerings are presented in a software-as-a-service model and deliver industry-specific tools for CRM, content management, and many other enterprise applications. Shares of VEEV have skyrocketed over 60% in 2019, hitting new highs along the way. Veeva has now seen its stock soar 390% over the last 36 months.

The company is coming off a fourth quarter of its fiscal 2019 that saw its revenue jump 25%. Veeva is scheduled to release its first-quarter fiscal 2020 financial results after the market closes on Wednesday, May 29. With this in mind, Veeva is projected to see its adjusted Q1 earnings surge over 36% on 22.5% revenue growth. This solid double-digit top and bottom-line expansion is projected to continue for the full year to the tune of 19% earnings growth and roughly 20% sales expansion. Plus, the cloud-solutions firm is expected to see its 2021 revenue climb 18% above our current-year estimate. Veeva is currently a Zacks Rank #2 (Buy).

3. Square SQ

Square stock has underperformed its industry in 2019, but is still up roughly 19%. Despite the climb, shares of SQ are up just 21% over the last 12 months as investors cool on this once high-flying fintech powerhouse. Square, which is run by Twitter TWTR CEO Jack Dorsey, is still up over 200% in the last two years, and its growth prospects remain strong. Square has evolved from a credit card processor for the mobile age into a complete financial services firm, offering business loans, peer-to-peer payment options, debit cards, and more. SQ has become more attractive to larger businesses and its P2P payment platform, the Cash App, stands out against rival offerings from PayPal PYPL and even JP Morgan JPM.

Our current Zacks Consensus Estimate calls for its full-year EPS figure to soar nearly 62% to reach $0.76 per share on roughly 36% revenue expansion. Meanwhile, Square’s fiscal 2020 revenue is expected to come in 28.4% above our $4.48 billion 2019 estimate to reach $5.75 billion. On top of that, Square’s fiscal 2020 earnings are projected to jump 48% higher than our current-year estimate. Investors should also note that Square has seen its 2019 earnings estimate revision activity trend heavily in the right direction recently, which helps it earn a Zacks Rank #2 (Buy).

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